For over a decade, AWS has invested in developing cloud infrastructure and services in Ireland. Today a new report, based on a study by leading independent research organization Indecon International Economic Consultants (Indecon), has outlined the impact of these investments, in areas such as job creation, local supplier networks, community support and export opportunities for Irish contractors.
AWS investments in Ireland were found to be:
- Sustaining 8,700 jobs directly and indirectly
- Generating an estimated economic growth of €1.45 billion a year
- Increasing economic output by almost €7.5 billion between 2011-2020 and investing over €4.4 billion in direct capital and operational spend in the same period
- Enabling over 550 local Irish suppliers to expand operations, enhance their skills and support local communities
- Increasing export opportunities for Irish contractors to 20 countries worldwide
“AWS recognised the skills and capabilities on offer in Ireland and invested in the country at a time when other businesses were looking elsewhere.”
Generating jobs in Ireland
AWS opened its first infrastructure region in Ireland in 2007 and today supports over 8,700 jobs across the Irish economy. This is made up of over 3,000 employees, nearly 4,000 people working for contractors and sub-suppliers and also more than 1,700 in induced employment from these activities.
According to figures from IDA Ireland, AWS ranked third among the largest job creators in the IDA client base in 2019 and has been in the top ten since 2015. “Cloud-enabled digital services are now pervading every industry and Ireland’s reputation in this space is enabling investment,” says Martin Shanahan, CEO of IDA. “The data center infrastructure underlying the cloud also makes a broader economic contribution to the country. Amazon and AWS announcements in 2018 and 2020 of additional jobs in the near term are a clear example of this.”
AWS investment is a catalyst for Ireland’s economic growth
AWS’s operations have expanded Ireland’s economic output by almost €7.5 billion over the past decade. In 2020, AWS generated growth in Ireland’s economic output by approximately €1.45 billion and is forecast to exceed approximately €1.5 billion each year in 2021, 2022 and 2023.
Over the past five years, AWS has invested over €100 million in design engineering in Ireland, focused on ensuring that our infrastructure is run in the most sustainable way. A significant driver of this investment in design engineering comes from AWS’s commitment to advanced designs and cooling systems, which mean AWS data centers are more energy efficient than using on-premises traditional data centers.
The research, development and innovative design behind our data centers in Ireland is often replicated in our facilities worldwide. For example, Dublin-based engineering firm Hanley Energy experienced rapid international growth after a prototype developed with AWS in Ireland was adopted in its data centers worldwide.
Today, Hanley Energy employs more than 260 people across the Americas, Africa, Europe and Australia. In total, AWS spent €88 million on research and development (R&D) in Ireland between 2016 and 2018 – approximately 5% of all R&D spending by large companies in the country. That figure will continue to grow as AWS builds its innovation capacity in Ireland, with the level of 2019 expenditure almost 16 times the amount spent in 2016. Suppliers to AWS data centers are located across all regions in Ireland, and the benefits of working with AWS are felt in communities nationwide.
For example, an AWS supplier based in County Meath manufactures and provides electrical control panels to AWS data centers. To build the panels, the supplier sources the steel enclosure from a specialist steel fabricator in Dundalk, County Louth. The specialist steel fabricator sources components such as steel and powder paint from other companies in their region. Additional components, such as electrical components and shipping crates, are all sourced from other Irish sub-suppliers.
Strengthening the local supplier network
Indecon found that AWS has generated new business for at least 550 Irish suppliers and sub-suppliers. This includes major construction contractors, mechanical and electrical suppliers, professional services and a wide range of logistics services provided by local businesses.
“Working for and with companies like AWS has been transformative… for our industry and has fuelled an export boom for construction companies.”
Many Irish companies, including Hanley Energy, Collen Construction and Danann Air, are among the businesses that have grown alongside AWS in Ireland over the last decade. “Much of our growth can be credited to a single technical solution we developed with AWS in Ireland,” says Dennis Nordon, Managing Director of Hanley Energy. “We partnered with AWS to create the concept and prototype in 2012, then AWS deployed it in its data centers worldwide by the end of 2014.”
Bringing benefits to local communities
Investment also brings benefits to local communities as more spending takes place across services and amenities. Indecon research found that 62% of respondents thought the effect on businesses in areas near data centers was either very significant or significant, with 60% similarly confident of the effect in boosting local employment. Some 83% of respondents agreed there was a very significant or significant impact on enhancing the reputation of local communities for investment.
“AWS construction sites produce a significant economic benefit to the locality – newsagents, hardware stores, etc. – as well as providing sponsorship and donations to local communities,” says Alan Dunne, Managing Director of Celtic Contractors. “This is a great benefit to areas that did not see building works on such a scale until AWS started developing. Supporting the local economy by engaging local suppliers is very valuable to SMEs in the area.”
According to Indecon, AWS helps enhance skills in its supplier network, especially in high-demand areas such as engineering and electronics. Almost three-quarters of respondents agreed that knowledge transfer in sub-supplier firms had increased as a result, underscoring the wider ways in which Irish data centres can help to raise skills in associated sectors.
Tom Parlon, CEO of Construction Industry Federation, explains: “The construction industry’s competence has long been a key attraction to foreign direct investment. Working for and with companies like AWS has been transformative technologically, culturally and reputationally for our industry. This has fuelled an export boom for construction companies. The skills we have acquired in the past decade mean we are recognized as global leaders in data center development with exports growing by nearly 10% for the past two years.”
Increasing export opportunities for Irish contractors
The big increase in export value of contracts from 2015-2020 shows the growth in export opportunities for suppliers. Irish firms are winning contracts to construct and develop AWS data centers outside of Ireland, the value of which increased 14-fold, rising from €16 million in 2015 to an estimated €228 million in 2020.
AWS investments in Ireland have had a positive impact on the ability of our suppliers in Ireland to specialize and achieve the scale required to open up significant export opportunities.
Hanley Energy and Collen Construction are examples of just two of the companies that are now exporting to 20 markets worldwide thanks to working with AWS. These include major European markets like the UK, Germany and the Netherlands, as well as projects in the USA, Japan, India and Australia.
By working with AWS, many companies have been able to develop specialist, world-leading expertise, meaning those Irish firms are now market leaders in providing materials and services to data centers globally.
Tommy Drumm, Managing Director of Collen Construction, which employs 350 people in Ireland as well as Germany and Sweden, describes his company’s growth as “credited entirely” to their work with AWS data centers: “Working with AWS makes it easier for us mobilize within a new market – they help us with local knowledge, research and supporting infrastructure.” Tommy adds: “A company like AWS at the leading edge of innovation is invaluable to Ireland and gives us an opportunity to raise the bar on our capabilities nationally, and then we keep learning as we expand and travel further afield.”
“The growth of the data center industry in Ireland has given rise to expert technical firms across engineering, manufacturing, logistics and construction. These firms are now realizing their global ambition and exporting around the world,” says Julie Sinnamon, CEO of Enterprise Ireland.
Millions of customers – including the fastest-growing start-ups, largest enterprises, and leading Government agencies – are using AWS to lower costs, become more agile, and innovate faster. AWS provides cloud technology to a range of Irish start-ups such as Intercom and Swrve, tele-health providers such as MyClinic365, and established businesses like Ryanair, Bank of Ireland and Netflix. Government agencies such as Ordnance Survey Ireland (OSI) and the European Commission as well as not-for-profits and universities are using AWS technologies to reduce costs, innovate, grow and scale their operations.
Cloud computing allows organizations to access technology services as needed, such as computing power, storage, and databases, instead of owning and maintaining their own physical data centers and servers.
About the report
AWS Impact: Supporting Ireland’s Economic Growth uses an evidence-based model carried out by Indecon International Economic Consultants (Indecon).
Indecon examined data from a wide range of sources to ensure the most accurate representation of the effects of AWS’s investment in the Irish economy, including the Government of Ireland’s Central Statistics Office data, detailed analysis of AWS internal data, and the results of an Indecon survey of major construction and sub-supplier enterprises.